Now it Makes Sense - REJECT THIS DEAL This is tied to the Vector deal, no wonder they were pushing to have the CFO (who stands to profit in the longer term for tendering his shares) on the board.
- Having the CFO on the board reduces the board's independence from management. This may be particularly relevant for new board nominations and in considering the possibility of a sale or merger.
- It is highly unusual for the CFO of a TSX listed company to sit on his own board. CFOs typically attend board meetings and are available for questions from the board and can contribute to discussions regardless.
- The presence of the CFO on a seven person board means one less board seat for prospective board members with extensive business or technology experience. The Wall Street Journal article, "A 'Waste of a Board Seat'?" dated October 15, 2012 indicates boards are becoming increasingly independent of management. According to the article, only 19 CFOs of Fortune 500 companies sat on their own boards, down from 37 in 2005.
- Management has two board seats, representing 28.5% of the seven member board. Recent SEDI filings indicate that six officers have combined share ownership of about 5.6% of the outstanding shares. This illustrates that management is significantly over-represented on the board.